Amsterdam's name derives from Amstelredamme,[8] indicative of the city's origin: a dam in the river Amstel. Originating as a small fishing village in the late 12th century, Amsterdam became one of the most important ports in the world during the Dutch Golden Age, a result of its innovative developments in trade. During that time, the city was the leading center for finance and diamonds.[9] In the 19th and 20th centuries, the city expanded, and many new neighborhoods and suburbs were planned and built. The 17th-century canals of Amsterdam (in Dutch: 'grachtengordel'), located in the heart of Amsterdam, were added to the UNESCO World Heritage List in July 2010.

As the commercial capital of the Netherlands and one of the top financial centres in Europe, Amsterdam is considered an alpha world city by the Globalization and World Cities (GaWC) study group. The city is also the cultural capital of the Netherlands.[10] Many large Dutch institutions have their headquarters there, and 7 of the world's top 500 companies, including Philips and ING, are based in the city.[11] In 2012, Amsterdam was ranked 2nd best city to live by the Economist Intelligence Unit (EIU) [12] and 12th globally on quality of living by Mercer.[13] The city was previously ranked 3rd in innovation by 2thinknow in the Innovation Cities Index 2009.[14]